Transcription of Breaking Down the Business- Judgment Rule
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Breaking Down the Business- Judgment Rule
In the wake of corporate bankruptcies, government bailouts, and shareholder losses resulting from the economic downturn of 2008, shareholders are increasingly turning to derivative suits in an effort to hold someone responsible for their financial losses. Corporate directors stand in a fiduciary relationship of trust and confidence with the corporation and its shareholders. As fiduciaries, corporate directors owe the corporation and its shareholders fiduciary duties of diligence and fidelity in performing their corporate duties.
words, the business-judgment rule insulates directors from liability so long as the directors acted in good faith, without conflicts of interest, and did what they believed to be in the best interest of the corporation. Castetter, 184 F.3d at 1044 (affirming trial …
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